The importance of price in the development of the Marketing strategy
It is the combination of price and quality that attracts customers to the brand.
Price is defined as the exchange value of a good or service in the marketplace.
External and Internal Influences on Price
Nature of the market :
Whether it's Pure competition, Monopolistic competition, oligopoly, and monopoly
Consumer Demand for the Product:
Price elasticity of demand - small change in price results in a large change in volume.
Inelasticity of demand - a situation in which a price change does not have a significant impact on quantity purchased.
Channel Members
Production of Marketing Costs:
How much does the product cost? Shipping, labour, packaging, manufacturing, freight....
Pricing Objectives Influence Price Decisions
Maximizing Profit - to achieve a high profit margin, a high return on investment, and a recovery of capital invested.
Maximizing Sales Volume - to increase the volume of sales each year
Establishing a Competitive Position
Above, Equal and Below Competition which is competitive pricing
PRICING METHODS
It is the combination of price and quality that attracts customers to the brand.
Price is defined as the exchange value of a good or service in the marketplace.
External and Internal Influences on Price
Nature of the market :
Whether it's Pure competition, Monopolistic competition, oligopoly, and monopoly
Consumer Demand for the Product:
Price elasticity of demand - small change in price results in a large change in volume.
Inelasticity of demand - a situation in which a price change does not have a significant impact on quantity purchased.
Channel Members
Production of Marketing Costs:
How much does the product cost? Shipping, labour, packaging, manufacturing, freight....
Pricing Objectives Influence Price Decisions
Maximizing Profit - to achieve a high profit margin, a high return on investment, and a recovery of capital invested.
Maximizing Sales Volume - to increase the volume of sales each year
Establishing a Competitive Position
Above, Equal and Below Competition which is competitive pricing
PRICING METHODS
- Cost Based Pricing - Total costs plus desired profit determine the selling price
- Fixed Costed vs Variable costs
- Full Cost Pricing
- Target Pricing
- Break even Analysis
- Demand Based Pricing - What consumers are willing to pay determines the selling price
- Price Skimming 1. Backward Pricing 2. Forward Pricing
- Price Penetration - Establishing a low entry price to gain wide market acceptance quickly
- Competition Based Pricing - The position and the perception of the product relative to completive products determine the selling price.
Pricing and The Law
Ordinary Price Claims
Manufacturer's Suggested List Price
Double Ticketing and Bar Code Price Variances
Bait and Switch
Predatory Pricing
Price Fixing
Bait and Switch
Predatory Pricing
Price Fixing
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